Effects of Employer Mandate for Businesses and Individuals

Employers and insurance carriers do not have to begin reporting information in 2014, and

Employers over 50 employees who do not offer affordable coverage will not be subject to penalties in 2014.

This gives large employers significantly more time to strategically plan to fund their benefits or penalties, especially those who don’t currently offer a health plan. Employers are looking at options such as reducing hours or wages, changing job descriptions and roles among other things. It’s fair to say their will probably be some additional adjustments to the legislation but it does NOT mean the end for the Affordable Care Act.

This delay does not impact the Individual Mandate, meaning everyone is still required to purchase insurance (See Below). The delay also does not impact the Employer Notice Requirements, Subsidy Rules, Pricing Rules or Exchange Open Enrollment.

Employer Notice Requirements: By October 1, 2013, all employers (even if you just have one employee) are required to provide a notice to employees advising that guaranteed issue coverage is available in the Exchange (also known as the Health Insurance Marketplace). This notice will advise the employees the following:

Is the employer offering Minimum Essential Coverage or not?

If coverage is offered by the employer, is it affordable? Affordable coverage will be determined by the cost of single coverage for the least expensive plan offered by the employer being less than 9.5% of current W2 (Box 2) earnings.

Optional details can be included about the plan design.

Employers will need to re-evaluate their notice after renewal decisions are made for 2014 to determine if a revision needs to be distributed.

All employees, including Seasonal workers, must be provided this notice.

Subsidy Rules: Subsidies will be available to individuals on the Exchange if their household earnings are less than 400% of Federal Poverty Level and affordable coverage is not offered by the employer. If the employer offers affordable coverage to the employee, neither the employee nor dependents will be eligible for a subsidy on the Exchange. Individual coverage purchased on the Exchange must be paid for with after-tax funds. A Section 125 plan cannot be used to pre-tax the cost. For individuals accustomed to paying for coverage through a pre-tax arrangement, consider comparing the cost on the Exchange times 1.30 to the cost of coverage through a pre-tax arrangement with your employer. (Click Here for a Premium Subsidy Calculator Tool) that will help you determine what’s best for your family / your employees.

Pricing Rules: Beginning January 1, 2014, individuals and small groups (under 50 employees in most states), will be provided guarantee issue coverage rated only by the following four factors:

Age

Zip Code

Family Size

Tobacco Use

Plans will all include maternity and other “essential benefits” with deductibles limited to $2,000 Single/$4,000 Family and out-of-pocket maximums of $6,350 and $12,700. Costs cannot vary from the youngest (child) to the oldest (age 64) by more than 3:1. Tobacco users (more than 4 times per week for the last 6 months) will pay much more. This means that young and healthy individuals will pay more than they have in the past. How much more remains to be seen. Projections have been 40-200%. Rules may change between now and when rates are released. More will be known when the Exchange plans and rates are revealed sometime between July 31st and October 1st of 2013. If you currently have Individual Health Coverage, keep in mind that an increase in the cost of this plan is not a qualifying event to enroll in your employers plan. If you don’t currently have individual coverage and you think you may qualify to get a fully underwritten individual plan, now is the time to do so. For Rates and Plan Options check out http://www.catalisthealth.com

Exchange Open Enrollment: For this first deployment of the Exchange, Open Enrollment will begin on October 1, 2013 and continue until March 31, 2014. Benefits will be effective January 1, 2014 for anyone who enrolls by December 15th and the first of the month following for enrollments that happen by the 15th of the month thereafter, otherwise the first of the next month.

Catalist Consultants and our Team of Experts are the solution to your compliance dilemma. We are staying on top of the ever changing rules and our clients can relax knowing we’ve got them covered. Check out our Library of Resources at http://catalistconsulting.com/reform , watch our videos at https://vimeo.com/channels/healthcarereform or call us at 866.460.4321 to find out how we can help you grow your business.